LifeMasters' Bankruptcy: Isolated Case or Part of Trend?

The problem is, according to Linden, nurses calling from a call center once a month or less cannot have a real impact on reducing hospitalizations, improving health status, and cutting health costs. There simply isn't enough patient interaction in that design, he says.

Instead, chronically ill patients need remote monitoring and a medical home that seamlessly works together. He says large health plans already know this, see there is not a positive ROI in these programs, are bringing population health management programs in-house, and exploring the medical home model. While traditional DM vendor programs have lost favor, he says, other ideas like the medical home and tertiary care models are growing in popularity.

Not only is the model an issue, but health insurers have an advantage over disease management and population health management vendors because they already have patient data and can more easily build relationships with physicians. "[Vendors] have no relationship with doctors or the hospitals so there is absolutely nothing they can do except go through the patient," says Linden.

Linden says disease management companies need to realize that they should work to support physician practices and medical homes—and stop trying to go it alone with call centers.

"What they need to do is use their tremendous infrastructure to develop and support medical home-based models. Models that include a primary care physician or a provider that is a quarterback of the team, and build a team around that," says Linden.

"That's how they are going to have any chance to be viable in the long-term sense," he adds.

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